Melatonin is a highly conserved molecule. Its presence can be traced back to ancient photosynthetic prokaryotes. A primitive and primary function of melatonin is that it acts as a receptor-independent free radical scavenger and a broad-spectrum antioxidant. The receptor-dependent functions of melatonin were subsequently acquired during evolution. In the current review, we focus on melatonin metabolism which includes the synthetic rate-limiting enzymes, synthetic sites, potential regulatory mechanisms, bioavailability in humans, mechanisms of breakdown and functions of its metabolites. Recent evidence indicates that the original melatonin metabolite may be N1-acetyl-N2-formyl-5-methoxykynuramine (AFMK) rather than its commonly measured urinary excretory product 6-hydroxymelatonin sulfate. Numerous pathways for AFMK formation have been identified both in vitro and in vivo. These include enzymatic and pseudo-enzymatic pathways, interactions with reactive oxygen species (ROS)/reactive nitrogen species (RNS) and with ultraviolet irradiation. AFMK is present in mammals including humans, and is the only detectable melatonin metabolite in unicellular organisms and metazoans. 6-hydroxymelatonin sulfate has not been observed in these low evolutionary-ranked organisms. This implies that AFMK evolved earlier in evolution than 6-hydroxymelatonin sulfate as a melatonin metabolite. Via the AFMK pathway, a single melatonin molecule is reported to scavenge up to 10 ROS/RNS. That the free radical scavenging capacity of melatonin extends to its secondary, tertiary and quaternary metabolites is now documented. It appears that melatonin's interaction with ROS/RNS is a prolonged process that involves many of its derivatives. The process by which melatonin and its metabolites successively scavenge ROS/RNS is referred as the free radical scavenging cascade. This cascade reaction is a novel property of melatonin and explains how it differs from other conventional antioxidants. This cascade reaction makes melatonin highly effective, even at low concentrations, in protecting organisms from oxidative stress. In accordance with its protective function, substantial amounts of melatonin are found in tissues and organs which are frequently exposed to the hostile environmental insults such as the gut and skin or organs which have high oxygen consumption such as the brain. In addition, melatonin production may be upregulated by low intensity stressors such as dietary restriction in rats and exercise in humans. Intensive oxidative stress results in a rapid drop of circulating melatonin levels. This melatonin decline is not related to its reduced synthesis but to its rapid consumption, i.e. circulating melatonin is rapidly metabolized by interaction with ROS/RNS induced by stress. Rapid melatonin consumption during elevated stress may serve as a protective mechanism of organisms in which melatonin is used as a first-line defensive molecule against oxidative damage. The oxidative status of organisms modifies melatonin metabolism. It has been reported that the higher the oxidative state, the more AFMK is produced. The ratio of AFMK and another melatonin metabolite, cyclic 3-hydroxymelatonin, may serve as an indicator of the level of oxidative stress in organisms.